MoD awards Â£1.8bn contract to Canadian firm

The Ministry of Defence yesterday awarded a £1.8bn battlefield communications contract to a Canadian firm and claimed the move would secure 1,600 jobs in the UK.

The MoD was forced to counter concerns raised by a losing bidder, Thales, that giving the Bowman contract to Computer Devices Canada (CDC) would threaten hundreds of British jobs.

Geoff Hoon, the defence secretary, told the House of Commons: "CDC's solution provides employment opportunities in the UK in a broad range of system areas ... Ninety per cent of the work content of the CDC bid will be based in the UK – the highest proportion of any of the three bids." Mr Hoon said the 1,600 jobs promised under the CDC proposal included 400 at a new UK headquarters for the group in South Wales.

Thales, a French Group that incorporates Britain's Racal Electronics, said the move would immediately lead to the loss of up to 500 jobs at its Bracknell, Harrow and Crawley sites and up to 3,000 jobs in the longer term. TRW of the United States was the other unsuccessful bidder.

In an attempt to placate Thales, Mr Hoon said: "I want to stress, in particular, how much we have valued the significant Thales presence in the UK defence sector."

CDC said separately that the Bowman system had the potential to generate about £2bn for Britain in export contracts over 10 years.